Feb. 28 (Bloomberg) -- A Francis Bacon painting of a female nude sold for 20 million pounds ($39.7 million), including fees, last night in London as Sotheby's completed Europe's biggest contemporary-art sale.

The Bacon, the auction's top lot, missed its lower estimate, while paintings by Gerhard Richter and Lucio Fontana set records and a Lucian Freud nude was among the offerings that didn't sell.

``The gap between the A-plus and the average is getting wider,'' said New York art agent Philippe Segalot. ``That's as it should be. A selective market is a healthy market.''

The sale, held at a time of growing concern about a recession in the U.S. and a slumping dollar, was a second test of demand for contemporary-art in London this month.

Bacon's ``Study of a Nude With Figure in a Mirror'' (1969), which depicts the artist's friend and model Henrietta Moraes, sold to a European private collector bidding on the telephone. The hammer price of 17.8 million pounds was below the forecast of between 18 million pounds and 25 million pounds. The hammer price doesn't include commissions.

The anonymous seller was guaranteed a minimum amount near the low end of the canvas's estimate, said Sotheby's.

The price is the fifth-highest at auction for Bacon, said saleroom-result-tracker Artnet. The painting had come up for auction before, failing to sell at Sotheby's in 1992, Artnet said.

The Bacon record is $52.7 million, set in May 2007 at Sotheby's, New York, for the 1962 painting ``Study From Innocent X.'' On Feb. 6, Christie's International sold ``Triptych 1974-77'' for 26.3 million pounds including fees, also below estimate.

`Good Price'

``Twenty million pounds was a lot of money, and some people thought the image was simply too tough,'' said Alan Hobart of the London-based Pyms Gallery, who in December 2007, paid 13.7 million euros ($20.2 million) with fees for Bacon's 1961 painting, ``Seated Woman (Portrait of Muriel Belcher),'' at Sotheby's, Paris. ``Still, it was a good price,'' Hobart said.

Sotheby's 70-lot auction last night raised 95 million pounds with fees, against an estimate of 72 million pounds to 103 million pounds. The total was double the 45.8 million pounds with fees at Sotheby's equivalent sale last year, when 81 percent of lots sold.

Eighty percent of the artworks last night found buyers, with 46 percent selling above the estimate with fees. Sixty-four percent of lots sold to buyers from Europe, 30 percent to the U.S., four percent to Asia and two percent to ``other'' regions, said Sotheby's.

Warhol Portraits

``Quality made the difference,'' said Segalot. ``There are people prepared to pay top prices for A-plus works, and there were A-plus works tonight.'' He paid 10.2 million pounds, or 11.4 million pounds with fees, for Andy Warhol's 1986 ``Three Self- Portraits,'' against an estimate of 10 million pounds to 15 million pounds. The three silkscreens had been bought by the seller from the Anthony d'Offay Gallery, London, the day before Warhol died in 1987.

Segalot also bought a 1963 gold-glitter ``Fine di Dio'' painting by Fontana, estimated at 4 million pounds, for a record 10.3 million pounds with fees. The canvas was part-owned by Sotheby's, according to the catalog. Segalot declined to identify the client he was representing.

``Estimates are irrelevant in the 20th-century masterpiece market,'' said Tobias Meyer, Sotheby's worldwide head of contemporary art. ``There is a global community looking for truly great works of art.''

Sonic Youth

Among five other artists achieving records was Richter. His 1983 painting, ``Kerze (Candle),'' featured on the cover of Sonic Youth's 1988 album ``Daydream Nation,'' sold to an American private collector by telephone for 7.1 million pounds, or 8 million pounds with fees. That was more than quadruple the low estimate of 1.8 million pounds.

Conspicuous among the 14 unsold lots was Freud's 2001 nude ``After Breakfast,'' also part-owned by Sotheby's, which had an estimate of 1 million pounds to 1.5 million pounds.

Three out of 10 Chinese contemporary works valued at a record 7 million pounds to 9.8 million pounds failed to sell, including Yue Minjun's 1994 canvas, ``Overwhelm,'' priced at 1.2 million pounds to 1.8 million pounds.

Zhang Xiaogang's 2001 ``Big Family No. 1'' was among four guaranteed Chinese works entered by the French collector Marcel Brient. All sold within estimate, the Zhang clinching a lone commission bid of 1.7 million pounds with fees.

In January, a survey commissioned by the European Fine Art Foundation said that from 2003 to 2006 the value of Chinese contemporary-art sales had increased almost 100-fold.

``Chinese art has seen some explosive increases in price,'' said Cheyenne Westphal, Sotheby's European chairman of contemporary art. ``The growth is reflected in the estimates.''

On Feb. 6, Christie's contemporary auction totaled a low- estimate of 72.9 million pounds with fees. The selling rate of 69 percent was the lowest seen at Christie's, London, since 2003.

Kristine Koerber, a JMP Securities LLC analyst, today raised Sotheby's to ``outperform'' from ``market perform,'' with a price target of $42. The change ``reflects the continued strength in the art market despite the weakened macro-economic picture,'' she said in a report.

(Scott Reyburn writes about the art market for Bloomberg News. Any opinions expressed are his own.)

To contact the reporter on this story: Scott Reyburn in London at sreyburn@hotmail.com.

Last Updated: February 28, 2008 09:12 EST